This report made by the Registrants contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934.  Many forward-looking statements appear in “Item 7“Part I – Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2016 Annual Report and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in AEPTCo’s 2016 Annual Report included within AEPTCo’s Registration Statement,this quarterly report, but there are others throughout this document which may be identified by words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “will,” “should,” “could,” “would,” “project,” “continue” and similar expressions, and include statements reflecting future results or guidance and statements of outlook.  These matters are subject to risks and uncertainties that could cause actual results to differ materially from those projected.  Forward-looking statements in this document are presented as of the date of this document.  Except to the extent required by applicable law, management undertakes no obligation to update or revise any forward-looking statement.  Among the factors that could cause actual results to differ materially from those in the forward-looking statements are:

The forward-looking statements of the Registrants speak only as of the date of this report or as of the date they are made.  The Registrants expressly disclaim any obligation to update any forward-looking information.information, except as required by law.  For a more detailed discussion of these factors, see “Risk Factors” in Part I of the 20162022 Annual Report and in Part II of this report. Additionally, see “Risk Factors” in the AEPTCo 2016 Annual Report included within AEPTCo’s Registration Statement.

Investors should note that the Registrants announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, theThe Registrants may use the Investors section of AEP’s website (www.aep.com) to communicate with investors aboutas a distribution channel for material company information. Financial and other important information regarding the Registrants. ItRegistrants is possible that the financialroutinely posted on and accessible through AEP’s website at www.aep.com/investors/. In addition, you may automatically receive email alerts and other information posted there could be deemed to be material information. The informationabout the Registrants when you enroll your email address by visiting the “Email Alerts” section at www.aep.com/investors/.

Our principal corporate website address is www.aep.com. Information on AEP’sour website is not incorporated by reference herein and is not part of this report.

AEP’s weather-normalized retail sales volumes for the thirdsecond quarter of 2017 decreased2023 increased by 0.7% compared to1.5% from the thirdsecond quarter of 2016. AEP’s third quarter 2017 industrial sales increased by 1.7% compared to the third quarter of 2016. The growth in industrial sales was spread across many industries and most operating companies.2022. Weather-normalized residential sales decreased by 2.4% in the thirdsecond quarter of 20172023 from the second quarter of 2022. This decrease was primarily due to a reduction in usage per customer due to the impacts of inflation, partially offset by an increase in customers. Weather-normalized commercial sales increased by 7.7% in the second quarter of 2023 compared to the thirdsecond quarter of 2016. Weather-normalized2022. The increase in commercial sales decreasedwas primarily due to new data center loads and economic development. AEP’s second quarter 2023 industrial sales volumes increased by 1.3% in0.1% from the thirdsecond quarter of 2017 compared to the third quarter of 2016.2022.

AEP’s weather-normalized retail sales volumes for the ninesix months ended SeptemberJune 30, 2017 decreased2023 increased by 0.4%2.4% compared to the ninesix months ended SeptemberJune 30, 2016.2022. Weather-normalized residential sales decreased by 1.8% for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. This decrease was primarily due to a reduction in usage per customer due to the impacts of inflation, partially offset by an increase in customers. Weather-normalized commercial sales increased by 7.8% for the six months ended June 30, 2023 compared to the six months ended June 30, 2022. The increase in commercial sales was primarily due to new data center loads and economic development. AEP’s industrial sales volumes for the ninesix months ended SeptemberJune 30, 20172023 increased 1.6%by 2.6% compared to the ninesix months ended SeptemberJune 30, 2016.2022. The growthincrease in industrial sales was spread across many industriessectors.

The Registrants have experienced certain supply chain disruptions driven by several factors including the nine months ended September 30, 2017 comparedCOVID-19 pandemic, international tensions including the ramifications of regional conflict, increased demand due to the nine months ended September 30, 2016.

AEP and its utilities finance its operations with commercial paper and other variable rate instruments. AEP generally uses short-term borrowings to fund working capital needs until long-term funding is arranged. Sources of long-term funding includes the issuance of long-term debt. These financing options to maintain adequate liquidity are subject to fluctuations in interest rates. The United States economy has experienced a significant level of inflation that has contributed to increased uncertainty in the outlook of near-term economic activity, including whether inflation will continue and at what rate. To the extent interest rates continue to increase, it could reduce future net income and cash flows and impact financial condition.

Management continues to evaluate potential alternatives for the remaining merchant generation assets. These potential alternatives may include, but are not limited to, transfer or sale of AEP’s ownership interests,A prolonged continuation or a wind downfurther increase in the severity of merchant coal-fired generation fleet operations. Management has not set a specific time frame for a decision on these assets. These alternativessupply chain and inflationary disruptions could result in additional lossesincreases in the cost of certain goods, services and cost of capital and further extend lead times which could reduce future net income and cash flows and impact financial condition.

The growth of AEP’s regulated renewable generation portfolio reflects the company’s strategy to diversify generation resources to provide clean energy options to customers that meet both their energy and capacity needs.

AEP utilizes two subsidiaries within the Generation & Marketing segmentThe Registrants have received regulatory approvals from various state regulatory commissions to further develop its renewable portfolio.  AEP OnSite Partners, LLC works directly with wholesale and large retail customers to provide tailored solutions based upon market knowledge, technology innovations and deal structuring which may include distributed solar, wind, combined heat and power, energy storage, waste heat recovery, energy efficiency, peaking generation and other forms

SWEPCo constructed the Turk Plant, a base load 600 MW (650 MW net maximum capacity) pulverized coal ultra-supercritical generating unit in Arkansas, which was placed into servicein-service in December 2012 and is included in the Vertically Integrated Utilities segment. SWEPCo owns 73% (440 MWs/477 MWs) of the Turk Plant and operates the facility.

The APSC granted approval for SWEPCo to build the Turk Plant by issuing a Certificate of Environmental Compatibility and Public Need (CECPN) for the SWEPCo Arkansas jurisdictional share of the Turk Plant (approximatelyApproximately 20%).

In June 2023, SWEPCo filed rebuttal testimony with the APSC. In July 2023, additional intervenor testimony was filed with the APSC by the Attorney General of Arkansas and the APSC staff with recommendations consistent with the previously filed April 2023 intervenor testimony. A hearing is scheduled for the third quarter of 2023. As of SeptemberJune 30, 2017,2023, the net book value of the Turk Plant was $1.5$1.4 billion, before cost of removal including materialsCWIP and supplies inventory and CWIP. In October 2017, the LPSC staff filed a prudence review of the Turk Plant. See “Louisiana Turk Plant Prudence Review” section of Note 4.